What is the initial markup %? What are the planned sales for March? What are the

Question

What is the initial markup %?

What are the planned sales for March?

What are the markdown dollars for April?

What is the BOM stock for May?

What are the planned purchases at retail for May?

20. The linen department has planned sales of $375,000 for the spring-summer season. The turnover goal for the season is 1.8. Using the form provided, develop a six-month merchandise plan on the basis of the following information: Markdowns 10 Operating expenses 40% Profit 5,5% Cash discounts 0.9% of season's Markdowns Month of Season's Sales 16 15 February March 15 18 April 16 May 17 20 June 19 16 July 17 16 (a) Calculate initial markup (b) Distribute monthly planned sales. (c) Determine monthly dollar markdowns. (d) Determine BOM stock figures. (e) Find monthly planned purchases at retail.

Explanation / Answer

Since, there are multiple parts, I have answered the first four.

Part A)

The initial mark-up percentage is calculated as follows:

Initial Mark-Up Percentage = (Operating Expenses + Profit + Markdowns - Cash Disounts)/(Net Sales + Markdowns)

Using the values provided in the question, we get,

Initial Mark-Up Percentage = (40% + 5.5% + 10% - .9%)/(100% + 10%) = 49.64%

____

Part 2)

The distribution of monthly sales is given below:

____

Part 3)

The distribution of monthly dollar markdowns is given below:

____

Part 4)

To calculate the BOM figures, we need to determine the stock-to-sales ratio as follows:

Stock-to-Sales Ratio = 12/Target Turnover Goal (where 12 indicates months) = 12/1.8 = 6.67

Now, we can calculate the BOM figures as follows:

Month Sales (A) Percentage of Season's Sales (B) Planned Monthly Sales (A*B) February 375,000 16.00% 60,000 March 375,000 15.00% 56,250 April 375,000 16.00% 60,000 May 375,000 17.00% 63,750 June 375,000 19.00% 71,250 July 375,000 17.00% 63,750 Total 100.00% $375,000

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